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Supply chain upstream shocks and downstream concentration in the new energy sector: Balancing diversification and centralization

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  • Wang, Yuhao
  • Cheng, Pengfei

Abstract

The rapid growth of the global new energy sector requires balancing supply chain diversification and centralization to manage policy uncertainty and market volatility. Using data from China's A-share listed new energy firms (2005–2022), this study finds that (1) upstream firms' perceptions of economic policy uncertainty significantly reduce downstream supply chain concentration, driving firms to adopt diversification strategies to mitigate risks; (2) mechanism analysis shows that risk tolerance and digital transformation amplify this effect, while cost control and innovation alleviate it; (3) further analysis reveals significant dynamic effects—firms initially diversify in response to short-term shocks but adjust strategies over time to balance efficiency and flexibility as uncertainty persists. Moreover, geopolitical risks intensify the diversification effects of policy uncertainty by increasing supply chain instability; (4) heterogeneity analysis highlights regional differences, ownership structures, and industry characteristics as key factors shaping supply chain adjustments. This research offers valuable guidance for resource-dependent industries to enhance resilience and support sustainable development amid global energy transitions.

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  • Wang, Yuhao & Cheng, Pengfei, 2025. "Supply chain upstream shocks and downstream concentration in the new energy sector: Balancing diversification and centralization," Energy Economics, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325003342
    DOI: 10.1016/j.eneco.2025.108510
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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